Seychelles Locks in International Monetary Fund (IMF) Deal as Final Reviews Near Completion

 

A staff level agreement between Seychelles and the International Monetary Fund (IMF) has been reached following a mission to Victoria from 4 to 19 March 2026, with the outcome conveyed during a courtesy call on Vice President Sebastien Pillay at State House.

The IMF delegation was led by Mission Chief Mr Todd Schneider and included Minister Pierre Laporte, Ms Farayi Gwenhamo, IMF Resident Representative to Seychelles, and Mr Brian Commettant, First Deputy Governor of the Central Bank of Seychelles (CBS). The engagement focused on the conclusion of the mission, ongoing reforms, and the country’s economic outlook.

The discussions formed part of the final reviews of two IMF arrangements, the Extended Fund Facility and the Resilience and Sustainability Facility. A final decision by the IMF Executive Board is expected in May 2026.

Mr Schneider confirmed that IMF staff and the Seychellois authorities have reached agreement on the policies required to complete the final reviews. He indicated that Seychelles will receive about 45 million US dollars upon approval, bringing total IMF support to approximately 105.1 million US dollars since May 2023.

The IMF noted that Seychelles’ economy performed strongly in 2025, with growth estimated to have reached 5.1 percent, supported by high tourist arrivals. Inflation remained just below zero, while the government recorded a primary surplus of 2.5 percent of GDP, contributing to a reduction in public debt to 53.6 percent of GDP.

Tourism earnings also helped narrow the current account deficit to 6.5 percent of GDP and strengthened foreign exchange reserves to just over four months of import cover.

Looking ahead, the IMF projects that growth will slow to around 1.5 percent in 2026. Inflation is expected to rise to 2.6 percent, driven by higher global prices for oil and food, as well as increased shipping costs. Lower tourism income and higher import costs are also expected to widen the current account deficit, reduce foreign exchange reserves, and place pressure on government revenue, potentially increasing the fiscal deficit.

The IMF emphasised that these projections remain subject to uncertainty given evolving global conditions.

While most programme targets have been met, two reform areas will require additional time. These include establishing systems to enable banks to purchase government securities and completing reviews of key government ministries, which are now expected to be finalised by the end of 2026.

Progress has also been made on climate related reforms, although some components remain ongoing.

The IMF advised that the government should prepare measures to respond to possible economic changes, ensuring that support is targeted toward vulnerable groups and remains temporary. It also highlighted the importance of maintaining exchange rate flexibility alongside continued reforms.

Mr Schneider said the IMF will continue to support Seychelles. “The IMF remains committed to supporting Seychelles in maintaining macroeconomic stability in the face of new shocks,” he said.

Distributed by APO Group on behalf of State House Seychelles.